The government has adopted a plan to facilitate transfer of unused land of state-owned enterprises (SOEs) having outstanding bank loans of Tk100 crore or above, for their better commercial use and to expedite the country’s economic growth.
A recent inter-ministerial meeting at the Prime Minister’s Office with Principal Secretary Abul Kalam Azad in the chair made the decision. The decision was forwarded to the Ministry of Finance for its opinion, officials said.
The accumulated classified loan of 21 SOEs with the state-owned banks stood at about Tk166 crore out of the total outstanding loan of Tk32,971 crore as on December 31, 2014, according to the latest Bangladesh Economic Review. Of them, 10 SOEs maintain outstanding loan of over Tk100 crore.
In accordance with the decision, a provision would be accommodated in a proposed new law of Bangladesh Board of Investment (BoI) and Industrial Development that would have also a provision for facilitating merger of two state entities – the BoI and the Privatisation Commission.
“The BoI and Privatisation Commission merger law has already been finalised. It is supposed to be placed before the cabinet for approval within two months,” Abul Kalam Azad told the Dhaka Tribune on Thursday. “We will face problem if the draft law is not completed. So, we are reviewing every details of the draft law.”
Officials said the unused land of the SOEs is planned to be used to meet the land shortage, which investors consider as a major barrier to new investments.
The business community also often alleges that they cannot make fresh investment as getting a piece of land for setting up industries has become a very difficult task. Providing land was one of the major demands in the pre-budget meeting of the country’s apex trade body – the Federation of Bangladesh Chambers of Commerce and Industry (FBCCI).
“The country’s average GDP growth rate will expedite within a short period of time from the present level of around 6% if the government solves the problem of land to facilitate new investments,” said a senior official of the Finance Ministry.
He said the private sector investment is expected to boost the economy by utilising the unused land of the SOEs.
As per the decision, if the long-term loans of the SOEs stand above Tk100 crore, the land transfer price would be fixed by the cabinet committee on economic affairs. If the amount of outstanding loans of SOEs is below Tk100 crore, the transfer price of the land would be evaluated and fixed by the authorities of the state-owned industries and commercial enterprises.
As per the draft law, another provision would also be incorporated to exempt participation of the SOEs and autonomous government bodies in tender processes to transfer land.
The Privatisation Commission had conducted a survey during the Awami League-led alliance government’s last tenure. It found that 1,288 acres of land remained unused only in 39 sick state-owned industries as the commission listed them for privatisation.
Some 257 industrial units could easily be set up on the unused land and the government could earn an additional revenue of Tk15 billion a year by allowing private investment, according to an estimate.
The Privatisation Commission, however, dropped the privatisation move due to objection by an influential minister, said an official, requesting anonymity.
